Q3: Delinquencies Creep Up, Net Worth Above 10%
ALEXANDRIA, Va.-Deilinquencies continue to creep up at the nation's credit unions, but overall industry net worth remained above 10% at the end of Q3, according to data released by NCUA.
The agency's analysis showed the economy's effects being felt as overall credit union on average assets was just 0.28%. There were some glimmers of hope, as credit cards, used auto lending and first mortgages were up among the 7,637 federally insured credit unions. Other findings: * Delinquent loans as a percentage of total loans increased to 1.68% at Sept. 30 from 1.37% at year-end 2008, although the rate of increase has slowed.
* Net charge-offs to average loans grew to 1.17% from 0.85%.
* Assets increased 7.7% to $874 billion from $811.2 billion.
* Loans grew 1.7% to $575.5 billion from $566 billion.
* Shares increased 8.4% to $738.4 billion from $681.1 billion.
* Investments increased 24.7% to $206.6 billion from $165.7 billion.
* Net worth grew 2.0% to $87.9 billion from $86.2 billion.
* Membership increased 1.9% to 90.3 million from 88.6 million members.
* The loan-to-share ratio declined to 77.9% from 83.1% during the year, which has led to significant growth in investments.
* Lending saw used automobile loans produce 4.5% growth, while first mortgage real estate loans and lines of credit grew 4.1 percent in the first nine months of 2009.
* FICUs increased provisions for loan and lease losses by 30.7%.
* The number of real estate loans over 2 months delinquent, as a percentage of total real estate loans, increased to 1.79% from 1.20% at year-end 2008.
Matz Calls For MBL Cap Relief
ALEXANDRIA, Va.-NCUA Chairman Debbie Matz called on the Department of Treasury last week to support increasing or eliminating the statutory cap on credit union member business lending, and allow NCUA to establish the regulatory parameters.
"I believe any lending limitations should be regulatory, not statutory. NCUA is best positioned to set requirements and maintain limits on member business lending, utilizing our direct supervisory knowledge and application of firm safety and soundness standards," Matz said in a letter to Treasury. "Historically, credit unions have been successful at making member business loans. NCUA supports a proper balance of serving business lending needs with a prudent regulatory framework to protect safety of the institutions and of the National Credit Union Share Insurance Fund."
FDIC Slides Into The Red, But...
WASHINGTON-For the first time in almost two decades, the FDIC is posting red numbers. The FDIC reported that as of Sept. 30 it was running a negative balance of $8.2 billion, the result of the 124 bank failures so far in 2009. The bank insurance fund was last in the red in the early 1990s as the result of the savings and loan crisis and resulting failures. The FDIC insures deposits at 8,100 banks.
In a report released by the FDIC, the agency said it had increased the number of institutions it identifies as "problem banks" to 552, up from 416 as of June 30. The glimmer of good news? The amount of bad loans, from credit cards to commercial loans, is growing at a slower pace.
"The credit adversity we have been discussing for some time remains with us, and we expect it will be a couple of more quarters before we see a meaningful improvement in that trend," said FDIC Chair Sheila Bair in a released statement. "I am optimistic that if we address these problems head on, we will see clear signs of improvement in bank earnings and lending in 2010."
The FDIC recently OKd a plan in which its insured banks are to lend money to the fund by prepaying annual assessments that would otherwise have been due through 2012.
...Banks Turn $2.8B Q3 Profit
WASHINGTON-The nation's banking industry turned a $2.8-billion profit during the third quarter, due in large part to higher net interest income and growth in institutions' securities portfolios, according to figures released by the FDIC.
The Quarterly Banking Profile indicated fee income was more than three times the $879 million in net income banks reported during the same period one year earlier, and a turnaround from the $4.3 billion in losses banks posted during the second quarter of this year. The average net income margin was 3.51%, leading to a 4.8% rise in net interest income from a year earlier to $4.6 billion.
